Liverpool City Council has announced plans to spend £50m building 500 new homes over the next 18 months.

The authority is rolling out the first phase of its flagship new house building company Foundations and has laid out the work that will now take place.

A report to the council’s cabinet tomorrow sets out a £50m budget to deliver the first phase of a 10,000 build and refurbishment programme over the next 18 months and recommends the approval to begin recruiting a team of housing experts to deliver the scheme.

In launching Foundations, the city council wants to ‘dramatically shake up” the city’s housing market and accelerate the rent to buy sector over the coming decade by offering packages that take a percentage from rent towards a deposit.

The new company, which was formally established in January, will also aim to create bespoke properties for the homeless, foster carers, large families, the elderly and people with a disability and to improve the availability of good quality, affordable homes in the city.

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Mayor Joe Anderson has said Foundations, which is earmarked to expand to a £500m programme, is fundamental to addressing both the city’s need to develop 30,000 new homes by 2030 and its economic future as surveys show the city’s housing supply is dominated by small terraced houses, which skews the city’s council tax revenues.

So what happens now?

Tomorrow’s cabinet report will sign off a plan to identify four streams of developing housing stock, all financed through a series of loans which would all be subject to a business case:

1) Purchase of New Build: The council has identified a number of sites across the city with planning permission for approx. 100 units which are due to be built out over the next 18 months (a mixture of 2-3 bedroom houses).

2) New Build on Council Land: The council have identified a site within its ownership, in north Liverpool, suitable for the development of a minimum of 120 homes (a mixture of 2-3 bedroom houses). It is proposed that the council itself invests in the construction of these homes and then sell on to Foundations.

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3) Purchase of Existing Homes: Part of the growth strategy includes a focus on buying and refurbishing homes in areas most likely to be facing issues of housing stress. Between 140 and 300 such properties fall into this category.

4) Land Asset Transfer: The investment in land ensures a robust supply chain for the company. This land will be paid over a period of time from either future house sales or from a dividend payment. The company will appraise this methodology over its initial business plan and cash flow proposals.

Foundations, which the council hopes will create 2,000 new jobs, is Mayor Joe Anderson’s flagship housing policy which he hopes will revolutionise the council’s role to bolster home ownership and for the local authority to act as a “high quality, ethical landlord” to help build sustainable neighbourhoods and offer tenants security of tenure.

It’s also hoped that Foundations will enable the council to ‘future proof’ the housing market for an ageing population, ensuring people can live independently for longer and provide intermediary accommodation that help keeps people out of long-term hospital stays.

One plan is to help reduce the number of properties in the city becoming void and lower the chances of properties being converted into inappropriate Houses in Multiple Occupation (HMOs).

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Mayor Anderson said: “Foundations will radically reshape Liverpool’s housing market and is fundamental to ensuring the city’s growth is fair to all – providing quality, affordable homes for people with many differing needs.

“A lot of work has been going on behind the scenes to get Foundations up and running and the recruitment of the team is the first step to delivering a housing programme that will transform the lives of thousands of people for generations to come.

“I expect to see a lot of activity over the coming 12 months as the team beds in and plans develop. This will be a real game changer for the city’s housing market and provide a much needed boost to our council tax revenues.”